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February 20, 2009

Global organic supply grows to match demand

by Sarah Hills

The amount of land dedicated to organic produce is growing due to government backing and market forces, opening up opportunities particularly in developing countries, according to a new report.

The latest statistics show that worldwide, 32.2m hectares were certified according to organic standards in 2007, which was 1.5m hectares more than the previous year, said the report from the International Federation of Organic Agriculture Movements (IFOAM) and the Research Institute of Organic Agriculture (FiBL).

The study called: “The World of Organic Agriculture: Statistics and Emerging Trends 2009” showed that by geographical region, growth was strongest in Latin America and Africa.

Dr Helga Willer, of the FiBL and an author of the report, told FoodNavigator.com that production of cash crops such as coffee, cocoa and tropical fruit had increased by as much as 30 per cent.

And the drivers behind the increase in organic farming were booming demand and policy support.

Willer said: “The market for organic food has grown very fast and that does have an impact on the production.

“But also governments are getting more interested and there are support schemes for the organic market.

“Countries are establishing organic regulations and very many developing countries are now in the process of creating regulations because they want to access the European and American markets, which are the biggest in the world.

“It has become very clear how important organic farming is for developing countries and their incomes.”

At the same time, co-author Lukas Kilcher said that there was an opportunity to build stronger local markets in developing countries as consumers there were also very interested in healthy food and supporting sustainable agriculture.

The global market for organic products reached an estimated $46bn in 2007 with most products being consumed in North America and Europe.

In Europe the organically managed land area grew to almost 7.8m hectares (1.9 per cent of agricultural land) in 2007.

Substantial increases were seen in Spain, Poland and the UK and countries with the highest number of farms and the largest organic land area was Italy, followed by Spain, Germany and the UK.

Crops that played a significant role included olives, fruits, nuts, grapes and cereals.

Demand for certain product categories – notably vegetables, salad crops, fruits and in some cases dairy products – was higher than supply, resulting in considerable amounts of products being imported.

But the report added: “The conversion period of two years limits how rapidly domestic producers can respond to a sudden growth in demand.

“So the challenge ahead lies in allowing trade to level out national imbalances between supply and demand while maintaining authenticity of and credibility of organic supply chains.”

However, Amarjit Sahota, director of Organic Monitor, who contributed to the report, told FoodNavigator.com that things had moved on considerably from 2007 as over the last six months demand has slowed down and was coming into line with supply.

Similarly, the report acknowledges that it is very difficult to predict trends for 2008 and beyond, as consumer habits may change in response to the financial crisis.

But it added: “The number of ethically committed consumers and of those that prefer products with a regional identity appears to be increasing.”

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